India's healthcare and medical technology (MedTech) sector is recognised as a sunrise sector with immense growth potential. The size of the Indian medical devices sector is estimated to be around $14 billion and it is expected to grow to $30 billion by 2030. India is the fourth largest medical devices market in Asia after Japan, China, and South Korea and among the top 20 global medical devices markets in the world.1 India's medical devices exports have also crossed the $4-billion mark,2 positioning the country as a global leader in the MedTech manufacturing sector.
This growth is not only due to an increasing focus on innovation and cost-effective production, but also to the proactive role of government initiatives like Make in India and Aatmanirbhar Bharat. These initiatives steadily build India's reputation as a hub for high-quality, affordable MedTech products.
Several key factors, including a sizeable domestic healthcare market, a skilled workforce and a robust network of R&D centres, fuel the Indian MedTech industry. The rise of medical tourism, advancements in healthcare infrastructure and increased foreign investments further strengthen India's potential in this field.
In the MedTech sector, India manufactures in vitro diagnostics (IVD) devices, essentially laboratory and diagnostic equipment, as well as medical devices, such as orthopedic and ophthalmic devices., with manufacturing concentrated between 800 domestic medical devices manufacturers.3 Some of the other segments in the sector are4:
- Patient aids
- Connected medical devices
- Self and homecare devices
- Hospital and laboratory equipment
Indian MedTech market has been steadily growing at 15% over the last three years, and it is projected to capture 10%-12% global market share over the next 25 years.5
Let's explore why India is emerging as a global hub for MedTech manufacturing, including this burgeoning sector's advantages, opportunities and outlook.
Key factors driving India's MedTech growth
The advantages of India's low manufacturing costs and high skillset in the MedTech sector outshined during the COVID-19 pandemic, emphasising the importance of modern, high-quality and reasonably priced medical devices and services.
The startup ecosystem in India's medical devices sector is diverse and vibrant, with 250+ organisations engaged in innovations and addressing essential health issues.6
Increasing income levels, health awareness and affordability have contributed significantly to the sector. The widespread use of mobile phones and improved internet connectivity has also enhanced MedTech growth. Another key aspect to consider is India's emergence as a preferred destination for medical tourism, which has recorded 2.36 million medical tourists from 210 countries during 2019-2024.7
Government policies fostering the growth of MedTech manufacturing in India
The government of India has initiated various schemes and programmes to encourage domestic and foreign investments in MedTech manufacturing in the nation. Notable amongst these is the Production-Linked Incentive (PLI) Scheme for the promotion of manufacturing of medical devices—commonly referred to as the PLI MD. This scheme, with an outlay of ₹3,420 crore, aims to provide financial support to manufacturers of medical devices8 for radiotherapy, imaging devices, anaesthesia, cardio-respiratory and critical care, and implants. So far, under this scheme, 19 green-field projects have been commissioned and production of 44 products including high end medical devices such as Linear Accelerator, MRI machines, CT-Scans, Mammograms, C- Arms, Ultrasound machines etc., which were previously imported into the country has started.9
Concurrently, the scheme for pharmaceuticals, with its budget of ₹15,000 crore, offers financial aid to manufacturers of IVD devices.10
Meanwhile, the Assistance to Medical Device Clusters for Common Facilities (AMD-CF)11 Scheme, under the department of pharmaceuticals, offers financial incentives for creating common infrastructure facilities to strengthen the existing and new medical device clusters. It also provides financial aid to government institutions and organisations to establish or strengthen the testing laboratories for medical devices. The scheme aims to help build or upgrade logistic centres, e-waste treatment facilities and testing labs.12
National Medical Device Policy and its role in India's MedTech manufacturing growth
The National Medical Devices Policy, 202313 emphasises on reducing the reliance on imports and help establish India as a major global hub for medical equipment manufacturing with a projected market value of $50 billion by 2030.14 It aims to accelerate the growth of the medical device industry while enhancing accessibility, innovation and skilled workforce.
Steps taken towards these goals include the introduction of a single window clearance and licensing portal viz-a-viz the National Single Window System (NSWS).
The policy has also strengthened the role of the National Pharmaceutical Pricing Authority (NPPA) to efficiently regulate the price of medical devices while taking lifecycle expenses and innovation into consideration.
Furthermore, revisions to the Uniform Code for Marketing of Medical Devices15 ensure the standardisation and quality regulation of medical devices manufactured while strengthening personal health data security.
Medical Device Parks and their contribution to India's MedTech sector
Medical Device Parks are aimed to help lower the infrastructural and manufacturing costs while boosting the accessibility and affordability of medical devices and establishing a global standard for producing and regulating medical devices. With an outlay of ₹400 crore, the scheme has sanctioned ₹100 crore each to Himachal Pradesh, Uttar Pradesh, Madhya Pradesh and Tamil Nadu.16
Andhra Pradesh Medtech Zone Ltd. (AMTZ) in Telangana is the world's largest medical devices manufacturing hub in the world with the presence of over 150 companies. It boasts common manufacturing facilities and common scientific facilities to produce a wide-ranging products from masks to MRI machines, CT scans, heart valves, peacemakers, and cyclotrons etc.17 It has received a grant-in-aid of ₹25 crore under the sub-scheme of assistance to medical device industry for common facility centre for the creation of a common facility for research and testing of superconducting magnetic coils.18
How 'Make in India' is helping
The 'Make in India' initiative, a significant nationwide programme that the government unveiled in September 2014, aims to stimulate manufacturing by offering incentives and investments for top-notch infrastructure and facilities, with a focus on the sunrise MedTech sector.19
To ensure everyone has access to affordable healthcare, the government has also placed a price cap on a select few medical devices. It leads to infrastructural development nationwide to accommodate local manufacturing and reduce import costs. A collaborative public-private partnership will be crucial to developing technology in the Medtech industry.
Facilitating innovation and R&D in MedTech
The promotion of innovation hubs and support for R&D infrastructure is a key area of focus in the government's interventions towards boosting India's MedTech sector. The National Policy on Research and Development and Innovation in Pharma-Medtech Sector, launched in September 2023, encourages R&D in pharmaceuticals and medical devices (domestic and international) to create an ecosystem for innovation across the sector.
The department of pharmaceuticals offers Promotion of Research and Innovation in Pharma MedTech Sector (PRIP) Scheme20 with an allocation of ₹5,000 crore. It aims to improve the nation's research infrastructure but with a focus on strengthening research organisations.
Within the scheme, ₹700 crore have been earmarked to strengthen research infrastructure by establishing Centres of Excellence (CoEs) in NIPERs (National Institutes of Pharmaceutical Education and Research) across the nation.21 The first of which was inaugurated at the Indian Institute of Technology (IIT), Banaras Hindu University in August this year.22
While ₹4,250 crore has been allocated to foster research in the pharmaceutical industry by supporting empirical studies in six key areas, including stem cell therapy, medical devices, antimicrobial resistance, etc. Financial support is available for manufacturers, MSMEs, startups and companies collaborating with government institutions for internal and external research.
Benefits for foreign investors in Indian MedTech
India's MedTech sector saw an unprecedented increase in foreign investments, amounting to $464 million in the first three quarters of 2023 alone.23 Experts are cautiously optimistic that this represents an upward trajectory. From April 2000 to December 2024, the medical and surgical appliances sector received $3.9 billion in FDI equity.24
Optimism that is upheld by recent investments, notable amongst which are that of Medtronic's $350 million investment. Headquartered in Dublin, Ireland, Medtronic announced its multimillion-dollar investment to expand its Engineering & Innovation Center in Hyderabad in March 2024.25
Japanese healthcare company Omron Healthcare has invested $15.5 million to establish a medical devices factory in Tamil Nadu.26 Similarly, Siemens Healthineers, the German healthcare company, has also committed to an investment of ₹1300 crore by 2025 for the establishment of an innovation and R&D hub in Bengaluru.27
Acknowledging the significance of the industry, the National Medical Devices Policy allows for a 100% FDI in the sector through the automatic route. Moreover, the manufacturers of medical devices within the nation are also exempt from income tax for 15 years and a deduction on profits for five years.28
With a skilled and talented workforce, government incentives to foster the sector and the easy availability of resources, India's MedTech sector is poised to make its mark on the global stage.
March 2024 saw the inauguration of 13 greenfield sites for the manufacture of medical devices.29 Under the PLI Scheme, 138 medical products have been approved and are earmarked for manufacturing. The nation is steadily moving forward in its journey towards becoming a global hub for MedTech manufacturing.
India currently imports 70-80% of its medical devices and is surging forward to reduce its import dependence to less than 50% in the next five years. It is working on a mission mode to ensure ‘zero defect, full effect' in MedTech manufacturing. The good news is that exports have overtaken imports in consumables and disposables in 2023, boosting the momentum in other pillars of the MedTech sector.30
While the National Medical Devices Policy, 2023 is slated to reduce the nation's dependency on medical imports, amendments to the FDI are set to attract FDI towards domestic manufacturing.
